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To Ensure Successful Legacy Planning, Ask About Intangibles

July 3, 2018

Financial advisors who want to ensure they benefit from the projected multi-trillion dollar wealth transfer should focus on how to help their clients with legacy planninng, Kristan Wojnar of Third Quarter Advisers writes on Seeking Alpha.

By 2050 baby boomers are expected to transfer around $30 trillion to their heirs, she writes. But financial advisors may find themselves scrambling to hold on to those assets: after all, just 2% of adult children who get an inheritance stay with their parents’ financial advisor, according to Wojnar. Sixty percent of adult children, meanwhile, haven’t even met their parents’ advisor, she writes.

What’s more, while estate planning addresses passing on wealth to the next generation in a tax-efficient manner, legacy planning goes much further, according to Wojnar. Legacy planning applies to the “intangible and core values” of the clients, she writes. Fortunately for advisors, the mere act of compiling legacy documents can help advisors build relationships with their clients’ heirs, demonstrating what makes their practice different from the competition and showing clients and their heirs that they understand and care about the intangibles, according to Wojnar.

Legacy documents, meanwhile, don’t necessarily have to be form letters: Wojnar writes that photo albums can often serve the same purpose even better. And there’s even an app for legacy planning, she writes.

What’s more important than the format of the legacy document is that advisors strive to assist clients in having conversations about their legacy with their heirs, according to Wojnar.

Here, advisors must pay attention to generational differences in communication styles and values, she writes. They should also prepare questions that address the intangibles important to their clients, such as ones addressing happy memories, proudest moments, mistakes made and most important lessons learned, according to Wojnar.

By Alex Padalka
  • To read the Seeking Alpha article cited in this story, click here.